Energy Department Steps in to Help Uranium Enrichment Company

WASHINGTON — The Energy Department announced Wednesday that it was stepping in to shore up an ailing company it created in the 1990s to privatize uranium enrichment, calling the rescue vital to maintaining nuclear weapons and national security.

The goal is to help the company, USEC, once known as the United States Enrichment Corporation, finish development work on a plant in Portsmouth, Ohio, that uses a new kind of centrifuge that the Energy Department hopes will leapfrog over existing European technology.

The department is taking control of tons of uranium left over from USEC’s enrichment operations that is considered to be waste and is thus listed by the company as a liability. That will in effect add $88 million to the company’s balance sheet, officials said. The aid was granted in anticipation of approval of the deal in Congress, where the nuclear weapons argument resonates. The administration hopes that lawmakers will grant its request for substantially more aid to the company, perhaps an additional $190 million or so, department officials said.

“Under the new agreement, we will be able to move forward with this critical research, development and demonstration effort while ensuring strong protections for the American taxpayers,” the energy secretary, Steven Chu, said in a statement.

Photo

A shuttered uranium enrichment plant in Ohio, above, where USEC is testing new technology.Credit
U.S. Department of Energy, via Associated Press

The federal government will own the centrifuges and lease them back to USEC. The Energy Department said that arrangement did not amount to the renationalization of the uranium enrichment project because it could become the basis for a commercial business.

The USEC plant could enrich uranium for ordinary civilian-style fuel for Watts Bar 1, a reactor built by the Tennessee Valley Authority that generates electricity but is also used to produce tritium, the form of hydrogen used in the hydrogen bomb. Foreign-owned enrichment companies operating in the United States are not allowed to supply enriched uranium for American weapons, and planners worry that the nation’s stockpile of the material could run low someday.

But critics say that USEC, which started its life in 1998 with technology dating from the wartime Manhattan Project and has been working ever since to develop an alternate technology, is unlikely to come up with one that can compete with mature designs built by Urenco, a European consortium, and Areva of France. Urenco recently opened a centrifuge plant near Eunice, N.M.

Representative Edward J. Markey, Democrat of Massachusetts, criticized the rescue plan. “The real risks of this nuclear bailout is for taxpayers, who will be on the hook for questionable government handouts that are worth more than the entire company,” he said.

USEC has been seeking a $2 billion loan guarantee to build a full-scale enrichment plant, but the Energy Department has said that it was not certain that the technology was ready.

A version of this article appears in print on June 14, 2012, on Page B5 of the New York edition with the headline: Energy Department Steps In to Help Uranium Enrichment Company. Order Reprints|Today's Paper|Subscribe